A jury has found that Nationwide Insurance Enterprise should be forced to pay $100 million for discrimination and for leaving minority neighborhoods out of marketing campaigns.

The record nine-figure award surprised even those who brought the lawsuit in Richmond, Va.

"We're absolutely stunned,'' Constance Chamberlin, executive director of Housing Opportunities Made Equal (HOME), told reporters after the jury announced its decision. "It's a remarkable verdict.''

The decision by a civil jury of six blacks and one white was the first of its kind in the nation. In addition to the $100 million in punitive damages, HOME was awarded $500,000 in compensatory damages as reimbursement for the costs of investigating Nationwide. Chamberlin said HOME would use the damages to help neighborhoods where residents were victims of discrimination.

But Chamberlin shouldn't go spending her group's bounty just yet.

Nationwide plans to appeal the decision to the Virginia Supreme Court, and legal experts point out that such nine-figure awards are usually reduced even if the facts are upheld on appeal.

John Millen, a spokesman for Nationwide, said that in this case, the facts do not support the decision.

"Nationwide Insurance is extremely disappointed by the jury's verdict," Millen said. "From the time the suit was filed, Nationwide has maintained that the plaintiff's allegations were unfounded.

"The plaintiffs have not yet presented any factual evidence to support their claims," he said. "Instead, they swayed the jury by relying on insinuations and emotionally charged allegations which have no place in a court of law."

Similar cases elsewhere against the Columbus, Ohio-based Nationwide have been settled, but the largest settlement to date had been $4.5 million in a case in Toledo, Ohio.

"Nationwide has written thousands of homeowner policies to African-American homeowners in the Richmond area and we do not unfairly discriminate,'' Millen said.

In March 1997, Nationwide and the Justice Department settled allegations that Nationwide discriminated on the basis of race. Nationwide did not admit any discrimination but agreed to change its underwriting practices and donated $13.2 million to assist low-income home buyers.

The U.S. Department of Housing and Urban Development provided $1.5 million to five fair housing groups, including HOME, in 1995 to conduct "testing" that singled out Nationwide and other insurers.

"Today's verdict is good news not just for minorities, but for inner city neighborhoods that have suffered far too long from redlining and other forms of discrimination,'' HUD Secretary Andrew Cuomo said.

HOME alleged that Nationwide denied homeowners insurance to black applicants in Richmond while approving coverage for whites under similar circumstances. HOME also charged during the two-week trial that the company's marketing efforts included "red-lining" -- targeted to ZIP codes in predominantly white areas to the exclusion of black neighborhoods.

Chamberlin claimed HOME had 15 pairs of people -- one black and one white in each case -- lie and pretend to be homeowners seeking insurance from Nationwide. In seven of the 15 cases, she contends,, the whites were quoted a premium and the blacks were not.

Millen said Nationwide is in strict compliance with all government laws and regulations.

"We remain committed to serving our customers in Richmond and throughout America, and will continue to grow our urban market presence," Millen said.

Nationwide Insurance Enterprise is a mutual insurance company that sells property/casualty policies, life insurance and financial services, managed health care and commercial insurance.

Published: October 27, 1998

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